Today's Columbus Dispatch reported the long-awaited details of the the district-by-district funding proposed by the Kasich Administration. So how did we do?
It seems as expected. It could have been much worse.
As described in my earlier article, our major funding streams from the State of Ohio are State Foundation Aid, Reimbursement of Tangible Personal Property Tax Revenue, and - for FY11 and FY12 only - a total of $4.3 million of one-time Federal Stimulus money. Here's how it looks so far:
State Foundation Aid
For FY11 (the fiscal year we'll finish on June 30, 2011), our Foundation Aid - shown as "Unrestricted Grants-in-Aid" on the Five Year Forecast - will be $33.996 million. A table just published by the Ohio Department of Education shows the FY11 number to be $33.115 million. I'm not exactly sure of the reason for this $881,000 difference (and will ask our Treasurer for clarification), but for now will assume that the $33.115 is the number we should be working with for this analysis to keep things apples-to-apples.
So according to this newly published table, we should expect to receive $33.127 million in FY12, or essentially the same amount as for FY11. The method for calculating this interim funding mechanism - the Governor says he has bigger plans for the next budget - is explained here. If this interim plan holds up through the legislative process, it puts us right on projections. And for FY12 the State Foundation Aid is projected to increase by about $1.5 million to $34.626 million.
When our last Five Year Forecast was prepared in Oct 2010, Treasurer Brian Wilson estimated that we would see a 10% reduction in State Foundation Aid for FY12 - on the order of $3.4 million. I've been concerned all along that the cut would be deeper. However this funding proposal appears to keep us pretty much whole.
So far, the news is good.
Reimbursement of Tangible Personal Property Tax
As I reported earlier, it looks like the $12 million we had forecasted to receive in FY12 and FY13 is going to be reduced by $3 million each year. I think this one blind-sided all of us, although Mr. Wilson's radar had recently picked up that this might be a place were cuts would be applied.
He was right. So in aggregate, his forecast was pretty much right on in regard to the net impact across these two categories.
Federal Stimulus Money
I don't know how many times this needs to be said: This was one-time money that gave our District the little extra cushion needed to show a tiny positive year-end cash balance for FY12, which in turn allowed the delaying of the next additional operating levy until this year. Of course, the calendar 2011 base pay freeze and step increase postponement accepted by the teachers, staff and administrators contributed as well.
This was a nice gift from the Federal Government (which of course was just piled onto the massive national debt), but it's over. The Five Year Forecast was built with that knowledge, and does not assume any additional Federal Stimulus dollars will be coming out way.
Bottom Line
The Revenue side of our Five Year Forecast looks like it lines up pretty well with the current funding information we're getting from the State. That's a relief.
But we can't rest easy. All we've seen so far is the Governor's proposal - we still have the legislative process ahead of us, so it could be several weeks before we know the final numbers.
The last time around, Governor Strickland's first cut with his so-called Evidence Based Model didn't stand up very well. It led to the creation of the Education Challenge Factor as a mechanism that allowed funding to be tweaked district by district. The addition of the ECF significantly changed the number for many districts.
Will there be such a 'tweak' this time? If so, will it be a big one or a little one?
Can't tell yet.
There are winners and losers in this scheme, as there is with any change in the school funding system. Cleveland Municipal Schools is a big winner, and will get $15.7 million more in FY12 than the $398 million they received in FY11, which is a 3.9% increase. But also in Cuyahoga County: Beachwood, Cuyahoga Heights, Independence, and Orange schools will see their State Aid reduced to zero.
Here in Franklin County, the big winner is Columbus City Schools, who will see $6.3 million (2.9%) added to their FY11 State Aid of $218 million. No districts in Franklin County get zeroed out, but Upper Arlington will lose more than half (54%) of the $3.3 million they were granted in FY11, and New Albany will lose 39% of their $2.4 million.
The explanatory document that accompanied this proposed funding table says that 421 districts will see an increase in funding for FY12 under this plan. That means 192 districts will stay the same or see cuts. Whether it gets tweaked will depend on the relative legislative power of the 421 districts (who tend to be urban and rural) versus the 192 (who tend to be suburbs).
I wouldn't be taking much of a risk by assuming that this table was constructed in such a way to ensure that a majority of the members of each House are in the 421...
Remember the Special Board of Education Meeting Monday March 28
Friday, March 25, 2011
Thursday, March 24, 2011
Notice of Special Meeting
HILLIARD CITY SCHOOL DISTRICT
BOARD OF EDUCATION
NOTICE OF SPECIAL MEETING
(RC 3313.16)
Notice is hereby given; there will be a SPECIAL meeting of the Board of Education of the Hilliard City School District on MONDAY, MARCH 28, 2011 at 7:00 P.M. located at the Hilliard City School District Administration Annex Building, 5323 Cemetery Road, Hilliard, Ohio. The meeting will be held in regular session to discuss budget reductions, personnel actions and any other business that may be lawfully considered.
The meeting is called by Brian W. Wilson, Treasurer/CFO of the Hilliard City School District Board of Education, at the direction of the President of said Board.
March 24, 2011
Signed:
Brian W. Wilson, Treasurer/CFO
Hilliard City School District
Board of Education
Sunday, March 20, 2011
The Governor's Budget Proposal
Note: If you haven't already done so, please read my earlier article on Governor Kasich's first Biennial Budget.
I've been asked by several folks what I think of the Governor's proposed budget for the next biennium.
The only answer I can give right now is "stay tuned" - we haven't seen the final deal yet. From here, the budget goes to the General Assembly to be translated into law, and it is possible that they will make some adjustments. However, one must presume that the Governor would not submit a budget without talking over key numbers with the leadership of the General Assembly, so I don't expect a lot of changes. But politics can be strange and unpredictable, so we'll have to see.
Our school district receives funding from the State of Ohio via several budgetary programs. Here are the major ones:
I've been asked by several folks what I think of the Governor's proposed budget for the next biennium.
The only answer I can give right now is "stay tuned" - we haven't seen the final deal yet. From here, the budget goes to the General Assembly to be translated into law, and it is possible that they will make some adjustments. However, one must presume that the Governor would not submit a budget without talking over key numbers with the leadership of the General Assembly, so I don't expect a lot of changes. But politics can be strange and unpredictable, so we'll have to see.
Our school district receives funding from the State of Ohio via several budgetary programs. Here are the major ones:
- Reimbursement of property taxes:
In years past, the General Assembly has enacted various reductions of property taxes. If you examine your property tax bill, you'll see lines labeled "10% Rollback" and "2 1/2% Rollback." These are exactly what they say - reductions in your property taxes. But property taxes are revenue sources for local governments such as counties and school districts, not the State. So to keep the local governments "whole," the State of Ohio sends grants to those local jurisdictions to make up for the lost property tax revenue.
There was some fear that these two reimbursements would be phased out. Luckily, that seems not to be the case. The impact would have been to increase our property taxes by 14%, yet not have generated one more dime of revenue for our school district (because we have already been getting reimbursed). So far, it seems as through these reimbursements have been retained, and that's a good thing.
But our luck is not so good with another kind of property tax - the Tangible Personal Property Tax (TPPT). This is a tax on things like business equipment, machinery used in manufacturing, and inventory, and is also paid to local governments, including school districts. Governor Taft signed legislation in 2005 that eliminated the TPPT, but simultaneously implemented a "phase-out" program that would replace the TPPT revenue with grants from the State of Ohio, much like the real property tax rollbacks I mentioned above.
However, there is one big difference with the TPPT tax repeal - the law specified that the reimbursements would be 100% of the lost TPPT revenue until some point in time, then be reduced a certain percentage each year until eliminated. Under the current law, the 100% reimbursement period lasts through FY13, then is gradually reduced until eliminated after FY18.
This is no small thing. Our annual funding from this reimbursement program was expected to be $12 million each year through FY13 (as documented in the Five Year Forecast), before entering the phase-out period.
The Governor's Budget intends to accelerate this phase-out. Specifically, in FY12, it looks like our TPPT reimbursement funding will be about $9 million, and in FY13 it will be about $6 million.
So in just those two years, we'll get approximately $9 million less in state funding. The picture in later years is less clear, as they are beyond the scope of this biennial budget. But the expectation is that the pain will continue for several years to come.
- School Foundation Aid:
Our largest chunk of funding from the State of Ohio is "School Foundation Aid." This amounts to around $33 million/yr, or about 21% of our total funding.
The budget documents as submitted by the Governor have the following to say about this item: "GRF (General Revenue Fund) appropriations in the school funding line items ... 200550 (Foundation Funding) increase by 1.4% from FY11 to FY12, and by 1.5% from FY12 to FY13" (see page D-186).
That sounds like good news, but remember that the State Foundation funding is not passed out evenly across all school districts. Since Hilliard is viewed as an affluent district by the State Board of Education, we get a smaller per-student funding amount than the many low income districts in Ohio.
In my opinion, we'll be very fortunate if our Foundation Aid funding stays in the ballpark of where we are right now.
- Federal Stimulus Dollars
As part of the massive Federal Stimulus Program enacted over the past couple of years, our school district received $2.5 million in FY11 and will get another $1.8 million in FY12. This money was first granted by the Federal Government to the State of Ohio, who then decided how to distribute it to Ohio's school districts. The method they choose was to apportion this money is same percentages as each district's share of the School Foundation Aid funding.
This money was very handy, in that it played a big part in being able to postpone asking the people of our community to pass another property tax levy.
Some folks take what I think is a bizarre point of view about this one-time money, which is that because the State of Ohio didn't continue this level of extra funding on its own, there has been a funding cut. It seems to me that a much more rational way to look at this money is as a one-time gift that helped in the short term, but doesn't do anything to address our fundamental fiscal situation.
Regardless of how you characterize this, it's $4.3 million that we used to fund normal operations that is not going to be in the revenue stream going forward. We knew this, and it was built into the current version of the Five Year Forecast.
So, at this stage of the process, it looks like we might be about where our Treasurer projected we would be, with State funding down about $3.3 million/yr compared to FY11.
That doesn't mean things are hunky-dory. We are still spending $5 million more than our revenue in FY11, and are projected to spend $12 million more than revenue in FY12 - ignoring revenue from a new levy.
And we still have to see what happens to our Foundation Aid funding.
Stay tuned.
That doesn't mean things are hunky-dory. We are still spending $5 million more than our revenue in FY11, and are projected to spend $12 million more than revenue in FY12 - ignoring revenue from a new levy.
And we still have to see what happens to our Foundation Aid funding.
Stay tuned.
Friday, March 4, 2011
Senate Passes Collective Bargaining Reform
This is a continuation of a conversation started here.
As anyone remotely involved in public education in Ohio knows, the Ohio Senate rapidly moved Senate Bill 5 - the legislation meant to radically reform the laws under which public employee unions operate - from Committee to the floor, where it was passed with little debate.
The new language for ORC 3317.13 (see SB5 as passed, beginning at line 4672) describes a process which must be used to evaluate teachers according to merit. In that process, the School Board must consider all of the following:
I'm a big fan of merit pay. More accurately, I'm a big fan of compensation systems that give each employee a chance to be rewarded with something meaningful to that employee. The trick is to find out what specific reward would motivate each individual, and find a way to provide that reward when an individual achieves certain agreed-upon results.
Unfortunately, we tend to think money is the only reward appropriate in an employment situation - it's certainly the easiest to administer - and I think that leads to the creation of ineffective and expensive compensation programs.
I think it's safe to say that most folks don't go into teaching for the money. But they don't go into it to fill out forms or teach to the test either. Nor do they want to be expending more energy managing classroom behavior than they do imparting knowledge. If we want to effectively reward the teachers, maybe we need to start by figuring out ways to diminish the bureaucracy and behavioral issues they have to deal with, and let them spend more time teaching. Then yes, let's measure their performance objectively, and reward appropriately. Let's look beyond money as being the only form of reward.
But this SB5 fails to change any of this. Both the unions and the management will continue to attempt to resolve performance/reward discussions with a contentious dialog about pay and benefits.
The reality is that if SB5 passes, we're going to enter an extremely painful period of trying to figure out how to turn this ambiguous law into a working collective bargaining agreement (CBA) with the unions. You can bet that the lawyers and consultants are licking their chops about this one. With the stroke of a pen, this law will create a whole new industry to advise school boards and unions how to architect and negotiate radically new CBAs.
I'm not so sure SB5 isn't really a jobs bill for the lawyers and consultants.
Sharing of Health Insurance Costs
The current CBAs with the teachers and staff specify that the employee pays 10% of the contribution necessary to fund our self-insured plan. Right now, the total contribution is $473.74/mo for single coverage, and $1,279.08/mo for family coverage, meaning that the employee pays $47.37/mo and $127.91/mo respectively.
The original version of SB5 required employees to pay 20% of the cost of health insurance coverage. This has been reduced to 15% in the amended bill that was passed by the full Senate (Section 3313.202(B)(1), see line 3872). Current CBAs will remain in force until their expiration (12/31/11 in the case of ours), but this says that no matter what is negotiated into the next agreement, the employee contribution to health coverage is going to increase by at least 5%. In dollars, that would be around $25/mo more for single coverage, and $65/mo more for family coverage.
I don't know what the Senate was thinking on this - that insurance costs are somehow isolated from the rest of the negotiation process? Does anyone doubt that sometime during the process of negotiating the compensation components of the next CBA, that someone on the union side will say "we want X to help cover the cost of increased insurance contributions"?
Seniority no longer the sole basis for order of layoffs
In principle, I think this is a good thing as well. If a school board finds itself in the regrettable position where folks have to be laid off, doesn't it make sense to cut the people who are least effective?
The catch is figuring out a layoff process which all accept as fair, and not capricious. More opportunity for the lawyers...
In summary...
This conversation is far from over. Regardless of what the House decides, or what gets presented to the Governor, we're going to have another go at it during the budget process. After all, it was through the last budget bill that Governor Strickland implemented most of his changes to school operations, notably the so-called Evidence Based Model.
Nor is this some haphazard political process. The Republicans control both houses of the General Assembly as well as the Governor's seat, and they are executing a well-planned strategy to stage these bills in preparation for the budget battle. But as we saw with the Senate vote on SB5, things are not going to necessarily go according to party lines, and our lawmakers are going to individually weigh the political benefits vs the political cost of their votes.
So who knows how it's going to turn out. I have no problem with the teachers, police officers, firefighters and other unionized public employees going down to the Statehouse and making their views known. And I respect those who support the Bill doing the same. Free Speech one of our most cherished Constitutional rights, and many have died to create and to defend that right.
I just wish those folks could do so without resorting to insults and childish behavior.
As anyone remotely involved in public education in Ohio knows, the Ohio Senate rapidly moved Senate Bill 5 - the legislation meant to radically reform the laws under which public employee unions operate - from Committee to the floor, where it was passed with little debate.
The text of SB5 as amended and passed is available here, along with a summary generated by the Senate. The next step is for the Ohio House of Representatives to consider the Bill. If they choose to pass it without modification, the Bill could be on the Governor's desk in a matter of days. I'd be surprised if this happens - there will almost surely be amendments made by the House, forcing a conference between the Senate and House to resolve differences. So there's still a lot of politics to happen before any law is created.
But I may be wrong. A good friend and much better observer of politics than I feels SB5 will be passed by the House without modification and signed by the Governor, leaving the real battle for the budget process, which starts soon.
But I may be wrong. A good friend and much better observer of politics than I feels SB5 will be passed by the House without modification and signed by the Governor, leaving the real battle for the budget process, which starts soon.
So here is where I stand at this point:
Right to Strike: SB5 takes away the ability for public sector workers to strike (Sec 4117.15 line 8393), and imposes significant penalties on those who do so illegally.
The threat of a teacher strike is the nuclear specter that hangs over every negotiation between a School Board and the employee unions. Some claim that the proof that the current collective bargaining laws have been working is that there have been few teacher strikes since it was implemented.
I think another explanation is that for most of the 30 years since those laws were passed, our economy was in one of the longest periods of growth and prosperity in American history. Therefore, school boards during that period felt confident that they could win sufficient support for additional tax levies to underwrite the deals the unions negotiated. No sense daring the teachers to strike if that's the case.
I think another explanation is that for most of the 30 years since those laws were passed, our economy was in one of the longest periods of growth and prosperity in American history. Therefore, school boards during that period felt confident that they could win sufficient support for additional tax levies to underwrite the deals the unions negotiated. No sense daring the teachers to strike if that's the case.
Those days are gone, and we're now in much tougher times. Does that mean it's impossible to negotiate a new collective bargaining agreement that fits the times?
That's the fear. Clearly our employees have shown a willingness to work a year without a base pay increase, and to postpone the application of step increases by half a year, and that is appreciated. But that's not a new contract, and we don't have a clear sense yet of what the teachers and staff are looking for in their next contract, which has to be negotiated this year.
We all know that the State of Ohio has a huge revenue-vs-spending gap to fill, reportedly on the order of $8 billion, and we've already been told to expect a multi-million dollar cut to our annual funding from the State. I'm concerned that our current estimate of a 10% funding reduction is overly optimistic, and that as a district viewed to be affluent by the lawmakers, we might be hit with cuts that are double that.
So some painful choices are going to have to be made. How will the impact of our down economy be apportioned between employees and taxpayers? Certainly the rate in which our expenses are growing - which really means the rate in which our cost of compensation and benefits is growing - has to be reduced significantly simply because our revenue is being significantly reduced. There are only two knobs to turn: 1) the number of people on the payroll; and, 2) the per-capita compensation and benefits costs. Neither is adjusted without anguish.
SB5 takes the nuclear option off the table while we try to work this out. I think that's a good thing, because a strike is first and foremost harmful to the children of our community.
So how does a negotiating impasse get resolved in this Bill? The process is described in Section 4117.14, beginning at line 7998:
The point is, would a school board stick to its last best offer in such a situation, or yield to the union position? We won't know until we get there --- and I hope we don't.
So with or without the right to strike, both parties need to bring empathy and reasonableness to the bargaining table this time around. I don't think the public has a lot of tolerance for strong arm tactics by either side right now, especially when it hurts the kids.
When it comes to the kids, they expect us all to be on the same side.
Merit Pay
SB5 takes the nuclear option off the table while we try to work this out. I think that's a good thing, because a strike is first and foremost harmful to the children of our community.
So how does a negotiating impasse get resolved in this Bill? The process is described in Section 4117.14, beginning at line 7998:
- 4117.14(C) If the parties are unable to reach an agreement, any party may request the State Employment Relations Board (SERB) to intervene. (line 8083)
SERB will then appoint a mediator to try to bring the parties to agreement.
Interestingly, at this point, both SERB and the school board would be required to post "conspicuously" the last offers from both the union and school board on the school district web site. This gives the public a chance to review the offers and let their feelings be known while negotiations are still underway. I think this is a good thing.
- 4117.14(C)(1) Any time after the appointment of a mediator, either party may request the appointment of a fact finder.
This person is appointed by SERB from its list of qualified persons. The fact finder will gather information and make recommendations for resolution of the remaining disputes. The fact finder is not permitted to disclose these recommendation to the public.
If either 60% of the union membership or 60% of the "legislative body" - the school board - reject the fact finder's recommendations, the recommendations are publicized and the process moves to the next step. Again, this creates an opportunity to hear feedback from the community.
- The school board, or a committee of the school board, conducts a public hearing at which both the school board and the union are required to explain their positions with respect to the report of the fact finder. At the conclusion of the hearing, the school board votes to accept either the board's last offer, or the union's last offer.
There is some understandable concern on the part of the unions about this last step. After all, why would the school board ever choose to reject its own last best offer in favor of the last best offer made by the union?
All I can say is that strange things happen in politics. It's no small thing that this section of the Bill requires that this last step take place in the full bright light of public scrutiny. There is little question that such a hearing would be attended by hundreds of union members, and probably hundreds of community members. It would be the same kind of scene as that we've been witnessing at the Statehouse this week. I'm not sure exactly where we would hold such a hearing in Hilliard - one of the high school gyms?
The point is, would a school board stick to its last best offer in such a situation, or yield to the union position? We won't know until we get there --- and I hope we don't.
So with or without the right to strike, both parties need to bring empathy and reasonableness to the bargaining table this time around. I don't think the public has a lot of tolerance for strong arm tactics by either side right now, especially when it hurts the kids.
When it comes to the kids, they expect us all to be on the same side.
Merit Pay
The new language for ORC 3317.13 (see SB5 as passed, beginning at line 4672) describes a process which must be used to evaluate teachers according to merit. In that process, the School Board must consider all of the following:
- the level of licensure the teacher has achieved;
- if the teacher is "highly qualified" as defined in ORC 3319.074;
- a "value-added measure" the School Board establishes to determine the performance of students in that teacher's classroom; and
- the results of an evaluation of the teacher, which might be in the form of a peer-review process negotiated with the union.
I'm a big fan of merit pay. More accurately, I'm a big fan of compensation systems that give each employee a chance to be rewarded with something meaningful to that employee. The trick is to find out what specific reward would motivate each individual, and find a way to provide that reward when an individual achieves certain agreed-upon results.
Unfortunately, we tend to think money is the only reward appropriate in an employment situation - it's certainly the easiest to administer - and I think that leads to the creation of ineffective and expensive compensation programs.
I think it's safe to say that most folks don't go into teaching for the money. But they don't go into it to fill out forms or teach to the test either. Nor do they want to be expending more energy managing classroom behavior than they do imparting knowledge. If we want to effectively reward the teachers, maybe we need to start by figuring out ways to diminish the bureaucracy and behavioral issues they have to deal with, and let them spend more time teaching. Then yes, let's measure their performance objectively, and reward appropriately. Let's look beyond money as being the only form of reward.
But this SB5 fails to change any of this. Both the unions and the management will continue to attempt to resolve performance/reward discussions with a contentious dialog about pay and benefits.
The reality is that if SB5 passes, we're going to enter an extremely painful period of trying to figure out how to turn this ambiguous law into a working collective bargaining agreement (CBA) with the unions. You can bet that the lawyers and consultants are licking their chops about this one. With the stroke of a pen, this law will create a whole new industry to advise school boards and unions how to architect and negotiate radically new CBAs.
I'm not so sure SB5 isn't really a jobs bill for the lawyers and consultants.
Sharing of Health Insurance Costs
The current CBAs with the teachers and staff specify that the employee pays 10% of the contribution necessary to fund our self-insured plan. Right now, the total contribution is $473.74/mo for single coverage, and $1,279.08/mo for family coverage, meaning that the employee pays $47.37/mo and $127.91/mo respectively.
The original version of SB5 required employees to pay 20% of the cost of health insurance coverage. This has been reduced to 15% in the amended bill that was passed by the full Senate (Section 3313.202(B)(1), see line 3872). Current CBAs will remain in force until their expiration (12/31/11 in the case of ours), but this says that no matter what is negotiated into the next agreement, the employee contribution to health coverage is going to increase by at least 5%. In dollars, that would be around $25/mo more for single coverage, and $65/mo more for family coverage.
I don't know what the Senate was thinking on this - that insurance costs are somehow isolated from the rest of the negotiation process? Does anyone doubt that sometime during the process of negotiating the compensation components of the next CBA, that someone on the union side will say "we want X to help cover the cost of increased insurance contributions"?
Seniority no longer the sole basis for order of layoffs
In principle, I think this is a good thing as well. If a school board finds itself in the regrettable position where folks have to be laid off, doesn't it make sense to cut the people who are least effective?
The catch is figuring out a layoff process which all accept as fair, and not capricious. More opportunity for the lawyers...
In summary...
This conversation is far from over. Regardless of what the House decides, or what gets presented to the Governor, we're going to have another go at it during the budget process. After all, it was through the last budget bill that Governor Strickland implemented most of his changes to school operations, notably the so-called Evidence Based Model.
Nor is this some haphazard political process. The Republicans control both houses of the General Assembly as well as the Governor's seat, and they are executing a well-planned strategy to stage these bills in preparation for the budget battle. But as we saw with the Senate vote on SB5, things are not going to necessarily go according to party lines, and our lawmakers are going to individually weigh the political benefits vs the political cost of their votes.
So who knows how it's going to turn out. I have no problem with the teachers, police officers, firefighters and other unionized public employees going down to the Statehouse and making their views known. And I respect those who support the Bill doing the same. Free Speech one of our most cherished Constitutional rights, and many have died to create and to defend that right.
I just wish those folks could do so without resorting to insults and childish behavior.
Friday, February 25, 2011
Another Look at the Ballantrae Question
As I've continued to ponder this question about whether Ballantrae is truly in jeopardy of being "taken over" by Columbus City Schools, I thought it would be a good idea to reread the language of the Win-Win Agreement. My thinking has changed somewhat as a result.
The Win-Win Agreement defines some terms which need to be put in the context of this discussion:
The Win-Win Agreement defines some terms which need to be put in the context of this discussion:
Annexed Territory means all areas of land which have been annexed to a city or village for municipal purposes, but on the effective date of this Agreement, have not been transferred to the school district of which the city or village is a part.
I believe this definition was created to deal with neighborhoods like The Glen or Golfview Woods, which at the time of the Agreement had already been annexed into Columbus, but remained in the Hilliard School District.
This doesn't seem to apply to Ballantrae, because those parcels of land had not yet been annexed to Dublin when the Win-Win Agreement became effective.
Future Annexed Territory means any area of land that is annexed to a city or village for municipal purposes after the effective date of this Joint Agreement
This would seem to be the definition that applies to Ballantrae. In other words, for the scope of the Win-Win Agreement, Ballantrae is a "Future Annexed Territory."
Municipal School District means the school district of the city in which the Annexed Territory or Future Annexed Territory is located.
If Ballantrae is a Future Annexed Territory, then "the school district of the city in which the... Future Annexed Territory is located" would seem to mean Dublin City Schools if you evaluate the Agreement as though it were written today. But at the time the Win-Win Agreement was signed, the parcels which now make up Ballantrae were in the Hilliard City School District, making Hilliard Schools the Municipal School District for the purposes of the Win-Win Agreement.
I think the challenge of interpreting this definition has to do with the fact that at the time the Win-Win Agreement was written, the focus was the relationship between Columbus Public Schools and the suburbs. It wasn't written with much thought given to cases where the two parties are both suburbs.
I think the challenge of interpreting this definition has to do with the fact that at the time the Win-Win Agreement was written, the focus was the relationship between Columbus Public Schools and the suburbs. It wasn't written with much thought given to cases where the two parties are both suburbs.
Section 4 of the agreement implements the first of my assertions, which is that any parcels in the City of Columbus but a suburban school district at the time the Win-Win Agreement was signed - e.g. The Glen and Golfview Woods - would remain in the suburban school district. It says:
Unless otherwise provided herein, Annexed Territory shall not hereafter be transferred to the Municipal School District for school purposes.
Section 5 of the agreement deals with all future annexations. I'll take the liberty of reordering the phrases to help make it more understandable:
Future Annexed Territory [e.g. the parcels which now make up Ballantrae] shall be automatically transferred for school purposes to the Municipal School District [e.g. Hilliard City Schools], except Future Annexed Territory from such other school districts as are identified and set forth in Exhibit A1 through A7..." unless:
- otherwise provided within, OR;
- otherwise provided in a valid agreement entered into between two or more Boards of Education [ie - an annexation/transfer agreement already in force between two or more school districts], OR;
- provided in an agreement between two or more Boards of Education, reached not later than ninety (90) days after the effective date of an Annexation [ie - an annexation/transfer agreement can still be worked out for 90 days following an annexation].
So what of all that language applies to the Ballantrae situation?
The exhibits referred to in the first paragraph of this section are descriptions, in words, of various areas of undeveloped land which Columbus City Schools agreed could be left in the suburban school district without fear that Columbus City Schools would later lay claims, even after it is developed, houses built, and there are kids attending the suburban school district. The areas described in the exhibits closely mirror the areas described in the water/sewer service agreements each suburb has with the City of Columbus.
While this implements the second of my assertions - that undeveloped land annexed into a suburb under the water/sewer service agreements would remain in whatever school district it was in prior to the annexation - it still doesn't seem to address Ballantrae, because those parcels are not included in Exhibit A4, the one which applies to Hilliard City Schools. Nor are they addressed in Exhibit A6 regarding Dublin City Schools, which seems much more concerned about the parts of the Dublin school district on the east side of the Scioto River. So how then does Ballantrae fit into this Agreement?
The Win-Win Agreement contains a clause which isn't often seen in a civil contract:
Section 8: This Agreement shall become effective only upon the effective date of legislation enacted by the Ohio General Assembly fully authorizing and enabling the provisions of this Agreement... In the absence of such legislation, this Agreement shall be deemed as never having been entered into by any of the Boards of Education.
In other words, this agreement is governed not only by what is "within the four corners of the contract," as the lawyers like to say, but also by that which is written into the Ohio Revised Code, in particular Section 3311.06, which I referred to in the previous article. This law contains its own set of definitions, one of which uses the same name as the Win-Win Agreement, but with a slightly different meaning (text from the ORC is shown in blue to help distinguish it from the language of the Win-Win Agreement):
Annexed territory means territory that has been annexed for municipal purposes to a city served by an urban school district, but on September 24, 1986, has not been transferred to the urban school district.
Compare that to the definition of "Annexed Territory in the Win-Win Agreement:
Annexed Territory means all areas of land which have been annexed to a city or village for municipal purposes, but on the effective date of this Agreement, have not been transferred to the school district of which the city or village is a part.
Notice the introduction of the term "urban school district" in ORC 3311.06, which defines this term this way:
Urban school district means a city school district with an average daily membership for the 1985-1986 school year in excess of twenty thousand that is the school district of a city that contains annexed territory.
In the context of central Ohio, the only school district which meets this criterion is Columbus City Schools.
It is also ORC 3311.06 which addresses contiguous territory:
The territory included within the boundaries of a city, local, exempted village, or joint vocational school district shall be contiguous except where a natural island forms an integral part of the district, [or] where the state board of education authorizes a noncontiguous school district, as provided in division (E)(1) of this section
... and (E)(1) says:
If territory annexed after September 24, 1986, is part of a school district that is a party to an annexation agreement with the urban school district serving the annexing city [This is true, the Ballantrae parcels are part of the Hilliard School District, which is a party to such an Agreement], the transfer of such territory shall be governed by the agreement [But the Agreement is silent in regard to this situation!].
If the agreement does not specify how the territory is to be dealt with [Which seems to be the case here], the boards of education of the district in which the territory is located and the urban school district shall negotiate with regard to the transfer of the territory which shall be transferred to the urban school district unless, not later than ninety days after the effective date of municipal annexation, the boards of education of both districts, by resolution adopted by a majority of the members of each board, agree that the territory will not be transferred and so inform the state board of education.
Uh-oh. This seems to say that Columbus Public Schools and Hilliard City Schools should have negotiated a side agreement when the Ballantrae parcels were annexed into Dublin. Or should the negotiation have been between Columbus Public Schools and Dublin City Schools, implying that Ballantrae should have been transferred to Dublin City Schools before the first homes were ever built and occupied?
This is where I need to again remind you that I am not an attorney. I can read the law and agreements as a lay person, and try to interpret what I read based on what I see in black and white before me, using the skills I learned studying logic, computer science and one course in Business Law. But the law is much more complicated than that, as it is augmented and clarified over time through the case law developed from trials and the decisions of judges.
So it seems that the situation with Ballantrae is not clear. Perhaps there is some case law which solves the ambiguity, or perhaps there are some side agreements between the Columbus, Hilliard, and Dublin which clear things up, although I doubt this is the case as it seems like such an agreement would have become public knowledge at some point.
I also suspect that this is an issue which didn't have to be raised right now, just to solve what seems to be a legal and contractual ambiguity. It is not at all clear that the City of Columbus will continue to enforce its long-standing policy of requiring annexation before water/sewer services are extended. One of the principals of the Big Darby Accord is that Columbus will extend water/sewer service into the Accord area while allowing it to remain in the townships. While the land immediately adjacent to Ballantrae is not included in the Big Darby Accord territory, the same motivation for Columbus applies - that the City simply isn't all that interested in taking on the fiscal and operational burden of continuing to extend the frontiers of the City - unless it results in more tax revenue for the City than it will have to expend to serve the newly annexed territory. Residential developments don't meet that criterion - only commercial developments do.
Note that the development along Hayden Run Rd which was annexed into Columbus also includes a new substantial commercial development at its westernmost reaches, where the Giant Eagle and other businesses now sit. I don't know this to be the case, but I can surmise developers working deals with the City of Columbus where they promise to build a commercial component along with the residential component, as an incentive for the City to accept the annexation and extend the water/sewer service.
The developer just needs to be willing to make the bet that new housing in the Columbus School District will sell, albeit at a reduced price compared to housing in a suburban school district. So far, that seems to be paying off for the Hayden Run Rd developers, perhaps because that area is served by Centennial High School and its feeders, which have demographics not that different from the suburban districts. If Columbus City Schools reassigned that area to Linden-McKinley High School, I suspect the demand for more houses would evaporate.
Whatever all these dynamics might be, I still feel there is some other motivation for initiating this conversation right now. The people of Ballantrae should ask the instigators exactly what that is.
Tuesday, February 22, 2011
Secession from the District: The Ballantrae Question
I've been asked twice this week about the conversation going on in Ballantrae in regard to leaving the Hilliard School District, supposedly to become part of Dublin City Schools.
Much of what I've heard seems to based on information I believe to be incorrect. Nor am I clear what the motivations are for pursuing this action, although my experience is that they are rarely matters of abstract philosophy. In other words, I suspect that there are a few folks who feel they have much to gain for personal reasons they have not fully disclosed, and are attempting to invoke other arguments to futher their private goals - even when those arguments have no merit.
For example, the main assertion seems to be that because of the annexation of a large tract of land roughly bounded by Cosgray, Hayden Run and Avery Rds into the City of Columbus, and the simultaneous transfer of that same land into Columbus City Schools, a situation has been created that somehow puts Ballantrae into jeopardy of being 'taken over' by Columbus City School as well.
This is hogwash.
The reason given for this supposed exposure is, as I understand it, that it is against Ohio law for school districts to have 'islands' (non-contiguous) parcels of land included their territories. Indeed ORC 3311.06 states precisely that, but with some exceptions. Those exceptions were written into the law specifically to deal with a unique situation that exists in Franklin County - the so-called "Win-Win Agreement."
A review of history is required.
Many decades ago, the City of Columbus was given exclusive control of the regional water/sewer system. In that role, the City of Columbus has negotiated water/sewer service agreements with the surrounding incorporated municipalities. Those agreements include clear descriptions of the extent to which a suburb can annex land and be allowed to extend water/sewer service. It also prohibits the extension of the water/sewer service into unincorporated parcels. In other words, a developer is required to have his land annexed into whichever city has the rights to extend the water/sewer system to that particular parcel. This will come back into play later in the story.
I suspect there is some other underlying motivation which is driving the instigators of this conversation. I would encourage the residents of Ballantrae to ferret that out before heading down the complex (ie expensive) process of initiating a transfer to another school district.
NOTE: please continue your reading to the followup article on this subject, found here.
Much of what I've heard seems to based on information I believe to be incorrect. Nor am I clear what the motivations are for pursuing this action, although my experience is that they are rarely matters of abstract philosophy. In other words, I suspect that there are a few folks who feel they have much to gain for personal reasons they have not fully disclosed, and are attempting to invoke other arguments to futher their private goals - even when those arguments have no merit.
For example, the main assertion seems to be that because of the annexation of a large tract of land roughly bounded by Cosgray, Hayden Run and Avery Rds into the City of Columbus, and the simultaneous transfer of that same land into Columbus City Schools, a situation has been created that somehow puts Ballantrae into jeopardy of being 'taken over' by Columbus City School as well.
This is hogwash.
The reason given for this supposed exposure is, as I understand it, that it is against Ohio law for school districts to have 'islands' (non-contiguous) parcels of land included their territories. Indeed ORC 3311.06 states precisely that, but with some exceptions. Those exceptions were written into the law specifically to deal with a unique situation that exists in Franklin County - the so-called "Win-Win Agreement."
A review of history is required.
Many decades ago, the City of Columbus was given exclusive control of the regional water/sewer system. In that role, the City of Columbus has negotiated water/sewer service agreements with the surrounding incorporated municipalities. Those agreements include clear descriptions of the extent to which a suburb can annex land and be allowed to extend water/sewer service. It also prohibits the extension of the water/sewer service into unincorporated parcels. In other words, a developer is required to have his land annexed into whichever city has the rights to extend the water/sewer system to that particular parcel. This will come back into play later in the story.
Columbus was very shrewd in the way it drew up this contract, for it preserves "growth corridors" between each suburb that allow the City of Columbus to expand to areas beyond the suburbs. For example, the western limit of the expansion area defined for the City of Hilliard is along a line which runs roughly due north from Bradley High School. Therefore, any land west of this line can be annexed only into the City of Columbus.
Now let's talk about the "Win-Win Agreement." Its history goes like this:
- In 1977, in the case of Penick v. Columbus Board of Education, the Federal Court ruled that busing be implemented in Columbus City Schools in order to racially integrate the schools. That led to a wave of "White Flight" to the suburbs.
- This "White Flight" created a demand for suburban housing that could be satisfied only by the construction of thousands upon thousands of new homes. It launched a boom for developers and home builders unlike any ever before seen in our region.
- Because all these new developments would have to be served by the regional water/sewer system, which is controlled by the City of Columbus, the fastest and most economical way to extend the water/sewer service system was to find pockets of land at the frontier of the existing water/sewer line network, but within suburban school district boundaries. In our community, among the first of these developments were The Glen and Golfview Woods. Both were outside the expansion zone assigned to the City of Hilliard, but were adjacent to the City of Columbus, and so were annexed by the developers into the City of Columbus, while remaining in the Hilliard School District.
- The Columbus School Board decided that the "White Flight" was a bad thing for Columbus City Schools, and it sought to have the State Board of Education - the state agency which sets school district boundaries - declare that municipal and school district boundaries should be made the same. The Columbus School Board had compelling arguments: a) the whole reason for the Penick ruling - desegregation - was being circumvented; and, b) Columbus school buildings were emptying out (e.g. Central High School, which is now COSI), while the suburbs were building schools like crazy, costing the taxpayers a ton of money.
- A time of great angst followed. Residents of neighborhoods like Golfview Woods (where my wife and I lived at the time) feared that they would be reassigned to Columbus Schools and their kids bused to schools far away because of the desegregation ruling. The demand for suburban housing dropped dramatically as potential homebuyers stood on the sidelines waiting to see how this situation would work out. This greatly concerned the developers, who have always carried a great deal of political weight in our region.
After a period of fighting spanning several years in both the courts and the Statehouse, the Win-Win Agreement was developed. Its key points are these:
- Any developed land in the City of Columbus but a suburban school district would be allowed to remain in the suburban school district as long as the suburban school district continues to make annual 'revenue sharing' payments to Columbus City Schools. I prefer to call these ransom payments, and ours is now $1 million/yr.
- Any undeveloped land annexed into a suburb under the terms of the water/services agreement would remain in the school district in which it was part prior to the annexation. This is the one that applies to Ballantrae.
- Any undeveloped land which is thereafter annexed into the City of Columbus is automatically shifted to Columbus City Schools. This is the clause which causes all those islands in the Columbus School District to develop, such as the big Dominion development along Hayden Run Rd between Cosgray and Avery.
Because of the existence of the Win-Win Agreement, certain exceptions were written into ORC 3311.06, the law governing the transfer of school district territory:
(C)(2) When the territory so annexed to a city or village comprises part but not all of the territory of a school district, the said territory becomes part of the city school district or the school district of which the village is a part only upon approval by the state board of education, unless the district in which the territory is located is a party to an annexation agreement with the city school district.
The Win-Win Agreement is an example (perhaps the only example) of such an annexation agreement. ORC 3311.06 goes on to say:
(F) An urban school district may enter into a comprehensive agreement with one or more school districts under which transfers of territory annexed by the city served by the urban school district after September 24, 1986, shall be governed by the agreement.
So, as long as the Win-Win Agreement stays in force, it supersedes the Ohio law in regard to school district boundaries and annexations. What is the risk of the Win-Win Agreement not remaining in force?
The risk isn't zero. But the situation is much more complicated than it was in the 1980s, when most of the land outside I-270 was undeveloped and unincorporated. Since then, the City of Columbus has indicated that it's not all that eager to expand its frontiers for residential development, which requires it to take on the attendant responsibilities of providing police, fire, garbage collection, street repair, and all the other expected city services.
But that's not exactly the question regarding Ballantrae, which was annexed into the City of Dublin before the first house was built. I think the question is whether, in the absence of an "annexation agreement" such as the Win-Win Agreement, Columbus City Schools - a wholly separate political entity than the City of Columbus - would be likely to make a push to have Ballantrae transferred to Columbus City Schools?
I don't think that's at all likely. The law seems to be written to favor having school districts aligned with municipalities, and so if the Win-Win Agreement terminates and Ballantrae has been made an island of the Hilliard school district because of annexations by the City of Columbus, the outcome would surely be to cure the problem by transferring Ballantrae to Dublin City Schools.
So what's the rush? Again, as a layman, I think the arguments asserting that the residents of Ballantrae must immediately take matters into their own hands before something bad happens - like an involuntary transfer to Columbus City Schools - are extremely weak.
NOTE: please continue your reading to the followup article on this subject, found here.
Friday, February 11, 2011
The Pendulum Swings: Proposed New Labor Laws
This is the first of a series of articles about the changes to collective bargaining being debated in the General Assembly. The next article can be found here.
In its Friday February 11, 2011 issue, The Columbus Dispatch published a story about a bill introduced to the Insurance, Commerce and Labor Committee of the Ohio Senate by Shannon Jones (R-Springboro) which would radically alter the rules governing unionized public sector workers. As you may know, the online version of the Dispatch allows readers to post comments. As I write this article, over 300 comments have been posted, and the number is going up quickly as I type.
Because these comments are not moderated and can be posted anonymously, it is common for the threads to devolve into idiotic and vile language, and it took only about dozen comments to get there with this one. While I often make comments on Dispatch stories dealing with public school economics - using my own name - I have no intention to do so on this one. There is simply no chance for reasoned discourse on the Dispatch forum at this point, and any attempt will be quickly buried in more lunacy.
That's the problem. We seem utterly incapable as a society of having a respectful and well-informed debate about such important things. We quickly go to our corners, get jazzed up by some partial truths and outright lies, and come out fighting.
The consequence is that our political landscape has become increasingly polarized, resulting in legislative agendas which seem to be intent as much on revenge as resolution. When we say that we want to "get even," that doesn't mean that we want an equitable outcome, but rather than we want to inflict as much harm on "the other side" as we perceive they inflicted on us when they had the power.
I fear that's the road we're going down on this discussion about unions in the public sector.
The perception, deserved or not, is that the public sector unions have lorded it over their communities for too long, with the aid and tacit approval of the politicians the unions work so hard to get elected, and as a result have driven those communities perilously close to fiscal ruin because of their excessive compensation demands, coupled with employment rules that handcuff the management.
I think the truth is that we have a problem with inertia. Inertia, as you know, is described in Newton's First Law of Motion this way: "Every object in a state rest or uniform motion tends to remain in that state unless an external force is applied to it."
We all have a painful understanding that our economy cycles between boom and bust. My parents were born in the Roaring Twenties, and therefore also witnessed the devastation of the Great Depression. They paid the price necessary to win World War II, and went on to build the great industrial success of the last half of the 20th century. That's not to say there weren't good days and bad after WWII, but our country had been lifted to a new level of economic performance, and we were protected by the laws and regulation developed as a result of the hard-learned lessons of the Depression - laws such as the Glass-Steagall Act.
Unfortunately many of those protections were undone during the past couple of decades, by both Democrats and Republicans, leading - in my opinion - directly to the financial shenanigans that have us teetering on the edge of another depression. We're driving on the cliff side of a mountain road with no guardrails, and we've dropped one wheel off onto the berm. I've been on such roads in the Rockies many times, and believe me, there's a high pucker factor associated with driving on them. That's a bit how I feel about the state of our economy.
Wages and benefits in the private sector tend to react pretty quickly to the general state of the economy. Some sector of business leads us into a new growth spurt, and while the companies in that industry scramble to hire the workers they need, compensation is driven up by the competition for those workers. As those workers spend their new-found money, the communities they live in thrive. We can all conjure up examples: aerospace engineers as NASA scaled up for the mission to land a person on the Moon; computer scientists as the Internet took off; investment bankers and lawyers when greed took the place of substance at the end of the 20th century.
Public sector workers are often left behind at the beginning of these booms, especially the unionized workers. Because they work under collective bargaining agreements, compensation matters are usually negotiated once every few years. If the economy takes off, union workers often see their friends and neighbors enjoy raises and bonuses while the union workers are stuck with a deal they negotiated in tougher times. In other words, the property of inertia which says that an object at rest will stay at rest comes into play.
Gradually, the benefits of an improving economy are negotiated into the union agreements, sometimes even with some components to help the union workers "catch up" to the private sector.
It is also often the case that about the time the public sector union agreements catch up with the private sector, the private sector goes sour, and private sector compensation takes a hit. Meanwhile, the union agreements are still firing on all cylinders, and will likely zoom past the private sector. This is the other side of inertia - that once an object is put into motion, it will keep going in the same direction, at the same velocity, until some outside force is applied.
This is where we are right now, in my opinion.
When private sector and public sector compensation numbers are close to each other, we don't hear many complaints from either group (by the way, I include wages, salaries and all other benefits such as pensions in this notion of "compensation"). I think it's also true that when private sector compensation starts getting well ahead of the public sector, the process of bringing the public sector workers back into alignment happens without a lot of angst. It's easy to be generous when your wallet is full.
But when the folks in the private sector perceive that the folks in the public sector are getting the better deal, it's a different story.
Much of the public sector is funded by income taxes, sales taxes and other taxes which are extremely sensitive to the state of the economy. When the economy booms, tax revenues boom with it, and our government agencies find themselves flush with cash. Much of that growth in revenue is invested in hiring more people, and paying the people they already have better.
However, when the economy takes a hit, income-related tax revenues fall off quickly, while the expenses of government entities tend to chug along as though nothing had changed (inertia again). Any cash reserves which might have been built up are quickly depleted, and the entity is faced with asking the taxpayers for more money and/or cutting expenses, which usually means laying off employees.
We've already seen this in municipalities, which derive nearly all of their funding from income-sensitive taxes. Even though much of their income comes from property taxes, which are not so sensitive to income, Ohio's school districts will join the party this year because a good chunk of school funding also comes from the State of Ohio, which has an $8-10 billion budget shortfall to cover, again largely because the state tax revenue stream is income sensitive.
Frankly, the public sector unions haven't always been very sympathetic to this situation. Perhaps it comes from remembering what it was like being left behind at the beginning of an economic boom, and having to fight to catch up. Perhaps it's a lack of empathy for the pain being felt by private sector workers at times like these, when folks are not only losing their jobs, but also chewing through their retirement savings trying to make mortgage payments, pay property taxes bills, and keep food on the table.
Of all the kinds of government entities out there, one that plays a special role in our society is the public school system. Yes, we respect and honor the folks in uniform, from the troops in battle overseas, to the cops and firefighters in our community. We appreciate the services provided by the folks who plow the snow and pick up our garbage. But our relationship with all of them is still not like the one we have with the teachers, to whom we entrust our children for half the days of the year.
We pick a community to live in because that's where we want to raise our kids, and where we want them to go to school. We choose (by the slimmest of margins) to tax ourselves to the extent necessary to fund our schools, which is substantially the same as saying to pay our teachers and staff, as nearly 90% of our budget is spent on compensation and benefits. In other words, we have a built-in bias to support our schools and our teachers.
But that relationship sometimes gets strained when it comes time to negotiate a new collective bargaining agreement. Such was the case last time, in 2008. The previous contract with the teachers expired on December 31, 2007, but negotiations stretched into following year, primarily because agreement could not be reached on how to apportion the cost of health insurance premiums (the employees contributed nothing to health insurance costs beforehand). Agreement was reached in May, but a 9.5 mill operating levy on the March ballot was soundly trounced.
Part of that may have been due to the tactics employed by the teachers' union when they felt the negotiations weren't going their way. One was a "work to the rule" action that left a bad taste for many parents. As I recall, the teachers also authorized their union leaders to call a strike, although it never got that far.
The notion that "we're all in it for the kids" breaks down pretty quickly when our kids are used as pawns in what should ethically be a conversation between the teachers and the taxpayers, and not impact the kids at all.
So I see this Senate Bill 5 as being the retribution for the failure of the public employee unions to figure out how to advance their agendas in a way that keeps them in economic sync with the private sector, and - in the particular case of the teachers' unions - for bringing our kids into the argument. They misused the power granted to them under the current law, and this new law means to take most of that power away.
I fear that this Bill is so vindictive that it will bring the system to a stop and initiate a time of chaos in our schools.
For example, the entirely of Section 3317.13 of the Ohio Revised Code, which describes much of the way teachers are paid, including the minimum pay schedule (which some believe also defines "steps" as law), is reduced to a two sentences reading: "(A) As used in this section, 'teacher' means all teachers employed by the board of education of any school district, including any cooperative education or joint vocational school district and all teachers employed by any educational service center governing board; (B) Each teacher shall be paid a salary based upon merit." (see lines 7276-7378).
Even if you are supportive of the notion of merit pay - and I am - there are some substantial operational obstacles to implementing such a program. Perhaps the greatest of these is determining the criteria for defining "merit." This proposed Bill is silent on this, which I think means that we'll replace the arguments over base pay increases, step increase and contributions to insurance premiums with ones having to do with crafting a definition of "merit." It's not as easy as one might think. Do you simply use the standardized test scores? If you do, how can you apportion the responsibility for the ability of a student to a current teacher versus prior teachers? If you try to use some kind of value-added measure, how do you compare the performance of a teacher who has many struggling students versus one who has a room full of gifted kids?
Having been a manager in the private sector for thirty years, I'm deeply worried about whether our administrators are prepared for this. After all, each and every teacher will have to be individually evaluated every year, and that evaluation will have to be used as the sole basis for determining how much the teacher is paid the following year. And we're not just talking teachers, but also the secretaries, bus drivers, custodians, IT specialists, groundskeepers and everyone else who is an employee of the District.
This is a brand new burden on our administrators, and they aren't trained for it. They do indeed perform evaluations, but not every year for every employee, and frankly the stakes aren't that high. As long as an employee is rated high enough to not warrant termination, that employee will be granted a raise according to whatever employment contract he/she works under.
Under this new system, should it become law, an administrator will be required to look an employee in the eye and explain why a certain raise amount was chosen for that employee. Weak leaders will be tempted to just give the same raise to every employee and avoid the controversy. But the whole idea of a merit system is to reward according to performance.
If you've made it this far ... thanks for hanging in there. There is much more than can and will be written about the effort of the current Governor and General Assembly to rewrite public labor law. Even if the law is enacted as written, you can be sure that it will be followed by months if not years of litigation and acrimony.
I ask only two things:
In its Friday February 11, 2011 issue, The Columbus Dispatch published a story about a bill introduced to the Insurance, Commerce and Labor Committee of the Ohio Senate by Shannon Jones (R-Springboro) which would radically alter the rules governing unionized public sector workers. As you may know, the online version of the Dispatch allows readers to post comments. As I write this article, over 300 comments have been posted, and the number is going up quickly as I type.
Because these comments are not moderated and can be posted anonymously, it is common for the threads to devolve into idiotic and vile language, and it took only about dozen comments to get there with this one. While I often make comments on Dispatch stories dealing with public school economics - using my own name - I have no intention to do so on this one. There is simply no chance for reasoned discourse on the Dispatch forum at this point, and any attempt will be quickly buried in more lunacy.
That's the problem. We seem utterly incapable as a society of having a respectful and well-informed debate about such important things. We quickly go to our corners, get jazzed up by some partial truths and outright lies, and come out fighting.
The consequence is that our political landscape has become increasingly polarized, resulting in legislative agendas which seem to be intent as much on revenge as resolution. When we say that we want to "get even," that doesn't mean that we want an equitable outcome, but rather than we want to inflict as much harm on "the other side" as we perceive they inflicted on us when they had the power.
I fear that's the road we're going down on this discussion about unions in the public sector.
The perception, deserved or not, is that the public sector unions have lorded it over their communities for too long, with the aid and tacit approval of the politicians the unions work so hard to get elected, and as a result have driven those communities perilously close to fiscal ruin because of their excessive compensation demands, coupled with employment rules that handcuff the management.
I think the truth is that we have a problem with inertia. Inertia, as you know, is described in Newton's First Law of Motion this way: "Every object in a state rest or uniform motion tends to remain in that state unless an external force is applied to it."
We all have a painful understanding that our economy cycles between boom and bust. My parents were born in the Roaring Twenties, and therefore also witnessed the devastation of the Great Depression. They paid the price necessary to win World War II, and went on to build the great industrial success of the last half of the 20th century. That's not to say there weren't good days and bad after WWII, but our country had been lifted to a new level of economic performance, and we were protected by the laws and regulation developed as a result of the hard-learned lessons of the Depression - laws such as the Glass-Steagall Act.
Unfortunately many of those protections were undone during the past couple of decades, by both Democrats and Republicans, leading - in my opinion - directly to the financial shenanigans that have us teetering on the edge of another depression. We're driving on the cliff side of a mountain road with no guardrails, and we've dropped one wheel off onto the berm. I've been on such roads in the Rockies many times, and believe me, there's a high pucker factor associated with driving on them. That's a bit how I feel about the state of our economy.
Wages and benefits in the private sector tend to react pretty quickly to the general state of the economy. Some sector of business leads us into a new growth spurt, and while the companies in that industry scramble to hire the workers they need, compensation is driven up by the competition for those workers. As those workers spend their new-found money, the communities they live in thrive. We can all conjure up examples: aerospace engineers as NASA scaled up for the mission to land a person on the Moon; computer scientists as the Internet took off; investment bankers and lawyers when greed took the place of substance at the end of the 20th century.
Public sector workers are often left behind at the beginning of these booms, especially the unionized workers. Because they work under collective bargaining agreements, compensation matters are usually negotiated once every few years. If the economy takes off, union workers often see their friends and neighbors enjoy raises and bonuses while the union workers are stuck with a deal they negotiated in tougher times. In other words, the property of inertia which says that an object at rest will stay at rest comes into play.
Gradually, the benefits of an improving economy are negotiated into the union agreements, sometimes even with some components to help the union workers "catch up" to the private sector.
It is also often the case that about the time the public sector union agreements catch up with the private sector, the private sector goes sour, and private sector compensation takes a hit. Meanwhile, the union agreements are still firing on all cylinders, and will likely zoom past the private sector. This is the other side of inertia - that once an object is put into motion, it will keep going in the same direction, at the same velocity, until some outside force is applied.
This is where we are right now, in my opinion.
When private sector and public sector compensation numbers are close to each other, we don't hear many complaints from either group (by the way, I include wages, salaries and all other benefits such as pensions in this notion of "compensation"). I think it's also true that when private sector compensation starts getting well ahead of the public sector, the process of bringing the public sector workers back into alignment happens without a lot of angst. It's easy to be generous when your wallet is full.
But when the folks in the private sector perceive that the folks in the public sector are getting the better deal, it's a different story.
Much of the public sector is funded by income taxes, sales taxes and other taxes which are extremely sensitive to the state of the economy. When the economy booms, tax revenues boom with it, and our government agencies find themselves flush with cash. Much of that growth in revenue is invested in hiring more people, and paying the people they already have better.
However, when the economy takes a hit, income-related tax revenues fall off quickly, while the expenses of government entities tend to chug along as though nothing had changed (inertia again). Any cash reserves which might have been built up are quickly depleted, and the entity is faced with asking the taxpayers for more money and/or cutting expenses, which usually means laying off employees.
We've already seen this in municipalities, which derive nearly all of their funding from income-sensitive taxes. Even though much of their income comes from property taxes, which are not so sensitive to income, Ohio's school districts will join the party this year because a good chunk of school funding also comes from the State of Ohio, which has an $8-10 billion budget shortfall to cover, again largely because the state tax revenue stream is income sensitive.
Frankly, the public sector unions haven't always been very sympathetic to this situation. Perhaps it comes from remembering what it was like being left behind at the beginning of an economic boom, and having to fight to catch up. Perhaps it's a lack of empathy for the pain being felt by private sector workers at times like these, when folks are not only losing their jobs, but also chewing through their retirement savings trying to make mortgage payments, pay property taxes bills, and keep food on the table.
Of all the kinds of government entities out there, one that plays a special role in our society is the public school system. Yes, we respect and honor the folks in uniform, from the troops in battle overseas, to the cops and firefighters in our community. We appreciate the services provided by the folks who plow the snow and pick up our garbage. But our relationship with all of them is still not like the one we have with the teachers, to whom we entrust our children for half the days of the year.
We pick a community to live in because that's where we want to raise our kids, and where we want them to go to school. We choose (by the slimmest of margins) to tax ourselves to the extent necessary to fund our schools, which is substantially the same as saying to pay our teachers and staff, as nearly 90% of our budget is spent on compensation and benefits. In other words, we have a built-in bias to support our schools and our teachers.
But that relationship sometimes gets strained when it comes time to negotiate a new collective bargaining agreement. Such was the case last time, in 2008. The previous contract with the teachers expired on December 31, 2007, but negotiations stretched into following year, primarily because agreement could not be reached on how to apportion the cost of health insurance premiums (the employees contributed nothing to health insurance costs beforehand). Agreement was reached in May, but a 9.5 mill operating levy on the March ballot was soundly trounced.
Part of that may have been due to the tactics employed by the teachers' union when they felt the negotiations weren't going their way. One was a "work to the rule" action that left a bad taste for many parents. As I recall, the teachers also authorized their union leaders to call a strike, although it never got that far.
The notion that "we're all in it for the kids" breaks down pretty quickly when our kids are used as pawns in what should ethically be a conversation between the teachers and the taxpayers, and not impact the kids at all.
So I see this Senate Bill 5 as being the retribution for the failure of the public employee unions to figure out how to advance their agendas in a way that keeps them in economic sync with the private sector, and - in the particular case of the teachers' unions - for bringing our kids into the argument. They misused the power granted to them under the current law, and this new law means to take most of that power away.
I fear that this Bill is so vindictive that it will bring the system to a stop and initiate a time of chaos in our schools.
For example, the entirely of Section 3317.13 of the Ohio Revised Code, which describes much of the way teachers are paid, including the minimum pay schedule (which some believe also defines "steps" as law), is reduced to a two sentences reading: "(A) As used in this section, 'teacher' means all teachers employed by the board of education of any school district, including any cooperative education or joint vocational school district and all teachers employed by any educational service center governing board; (B) Each teacher shall be paid a salary based upon merit." (see lines 7276-7378).
Even if you are supportive of the notion of merit pay - and I am - there are some substantial operational obstacles to implementing such a program. Perhaps the greatest of these is determining the criteria for defining "merit." This proposed Bill is silent on this, which I think means that we'll replace the arguments over base pay increases, step increase and contributions to insurance premiums with ones having to do with crafting a definition of "merit." It's not as easy as one might think. Do you simply use the standardized test scores? If you do, how can you apportion the responsibility for the ability of a student to a current teacher versus prior teachers? If you try to use some kind of value-added measure, how do you compare the performance of a teacher who has many struggling students versus one who has a room full of gifted kids?
Having been a manager in the private sector for thirty years, I'm deeply worried about whether our administrators are prepared for this. After all, each and every teacher will have to be individually evaluated every year, and that evaluation will have to be used as the sole basis for determining how much the teacher is paid the following year. And we're not just talking teachers, but also the secretaries, bus drivers, custodians, IT specialists, groundskeepers and everyone else who is an employee of the District.
This is a brand new burden on our administrators, and they aren't trained for it. They do indeed perform evaluations, but not every year for every employee, and frankly the stakes aren't that high. As long as an employee is rated high enough to not warrant termination, that employee will be granted a raise according to whatever employment contract he/she works under.
Under this new system, should it become law, an administrator will be required to look an employee in the eye and explain why a certain raise amount was chosen for that employee. Weak leaders will be tempted to just give the same raise to every employee and avoid the controversy. But the whole idea of a merit system is to reward according to performance.
If you've made it this far ... thanks for hanging in there. There is much more than can and will be written about the effort of the current Governor and General Assembly to rewrite public labor law. Even if the law is enacted as written, you can be sure that it will be followed by months if not years of litigation and acrimony.
I ask only two things:
- Let's find a way to debate and compromise so that when it's all over, we don't have a 'scorched Earth' outcome, and;
- Let's leave the kids out of it this time.
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